Helping clients through the health care maze

Health care in the U.S. is a mess. Real health care reform is nowhere on the horizon.

Not exactly breaking news for the general population. But for advisors it’s a clear and present call to arms. Until Washington wakes up, educating clients to become knowledgeable health insurance consumers will help them save on health care expenses and add value to your practice.

Here’s a primer on what they need to know — and how you can help them.

When it comes to health insurance, the majority of Americans continue to be covered by employer-based plans. Such coverage continues, for the most part, to be the best deal since the employer pays at least part of the premium for the employee. However, the employer often does not cover the family premium. Therefore, depending on the cost, it may be less expensive to have the rest of the family buy a separate policy. But one potential drawback to having two separate plans is having two separate deductibles. If the entire family is healthy and rarely uses health care, the two-plan approach is more likely to save money. But if a family member uses health care frequently, especially if the deductible is regularly met, one plan may prove the better deal.

When employer-based coverage or Medicare is not an option, individual insurance continues to be available on a guaranteed issue basis without underwriting, thanks to the Affordable Care Act. If a client’s income can be reduced to less than 400% poverty level, they qualify for subsidies to help pay for the coverage. If income is greater than 400% poverty level, clients pay the entire premium.

A client who is not a high health care user will likely be best served by a high-deductible bronze plan. Because the Trump administration stopped reimbursing insurance companies for cost-sharing subsidies, the companies are loading up their premium increases on mid-level silver plans, which are the most popular. Therefore, if a client is a frequent health care user, buying a gold plan, which offers more coverage, is usually the better deal.

Clients are often confused when plans with vastly different premium costs have the same deductibles, copays and benefits. What gives? The cheaper plans have narrow networks, meaning they have fewer doctors and hospitals on their panel. If a client chooses a narrow network plan and then goes out of network, the costs can be very high. Make certain a client understands these limitations.

One benefit of our current health care legislation is that every year, people can change health insurance without underwriting. If they choose a cheap plan and then get a serious illness, they can enroll in a more robust plan during the next open enrollment period. Just hope they don’t come down with a serious illness in January as they will have until the end of the year to make a change!

3 common health insurance traps

Make sure your clients are aware of three common traps when utilizing health insurance: unknowingly going out of network, going out of network for emergency care, and not making the most of coverage after out-of-pocket maximums are met.

Going out of network: Most doctors and hospitals will take any insurance, but — and this is a big but — they may be out of network. When making an appointment or scheduling a surgery, advise your client not to ask, “Do you take my insurance?” Instead encourage them to ask, “Are you in my network?” Just because a doctor accepts one carrier's insurance doesn’t mean they are in the company’s network. If they aren't in network, the doctor can charge you the higher, out-of-network prices. In the hospital, your client should insist that every person involved in their care be in network. Detailed documentation is very helpful if a client receives a bill that says some part of their care was out of network.

Going out of network for emergency care: If, in an emergency situation, a client or family member ends up in a hospital that is not in their network, they should insist on a transfer as soon as the patient is stabilized. Call the insurance company and let them know about the situation. Sometimes the hospital will agree to take in-network payment. The patient must get this in writing.

Making the most of coverage after out-of-pocket maximums are met: If a client has a bad health year and meets their out-of-pocket maximum, make sure they make the most of their coverage for the rest of the year. In June 2016, my husband had a serious head injury. Thankfully he is OK now, but while I was sitting in the emergency room, my financial planner brain immediately kicked in and I thought, “We are going to hit our $10,000 deductible.” After his recovery, he followed up with physical therapy for his multiple “old age” musculoskeletal complaints. We both had concerning skin bumps removed. Finally, I refilled a year’s worth of expensive medicines. And all for “free” because that one hospitalization was over $30,000!

The health care system encourages us to be better consumers but isn’t friendly when we actually try to shop for cost-effective care.

Because of the fee-for-service payment system, health care professionals are rewarded for providing more health services, which most often do not equate to the best health care. There are three profiles of physician — paternalistic, informational and collaborative. Thankfully, paternalistic medicine is going the way of the dinosaur. Currently, informational providers are the most common. They share many options with the patient but without understanding the patient’s health values and financial situation. Then they leave it up to the patient to make decisions.

The happy medium is the collaborative physician who takes the time to provide the best and most cost-effective care based on their patient’s input. The most important part of diagnosis hinges on the patient’s history. Providing the time-crunched doctor with a written narrative in advance of an appointment outlining current health issues, past medical history and everything the patient has done to address their situation will help the doctor ask the right questions to get the best diagnosis.

Most laboratory testing is used to confirm a suspected diagnosis or monitor treatment. Too often, however, doctors order tests because of protocol, which can lead to false positives, which takes patients down the expensive rabbit hole of further testing. To minimize unnecessary testing, the patient should ask the doctor, “How will this test help you with my diagnosis or treatment?” If the doctor can’t provide a good answer, ask if the test is really necessary.

My final plea to advisors: We all need to drive our politicians crazy until they actually fix our health care system.

All patient questions should be answered in layperson’s terms. A patient should never leave the visit without clarity on three things — how to address their health issue, what to expect from their treatment and the date of the follow-up visit. Doctors often tell patients to come back if they aren’t getting better, but they fail to give a time frame. By knowing the expected course of the illness, the patient can save time and money on unnecessary visits.

My final plea to advisors — who, after all, will double as patients at some point in their lives: We all need to drive our politicians crazy until they actually fix our health care system. Pay attention to current legislation and take five minutes a week to call your representatives to let them know your stance. Kaiser Health News and Health Affairs are great resources to stay up to date. If enough people scream, maybe we can get the health care reform we need to help our clients with health care costs.